1 00:00:00,200 --> 00:00:03,520 Speaker 1: Sticking with the financials, the sector reassured by President Elect 2 00:00:03,520 --> 00:00:06,680 Speaker 1: Trump's eco picks, including Scott Bessett for Treasury Secretary and 3 00:00:06,760 --> 00:00:10,200 Speaker 1: Kevin Hassett for NEC. Tim Adams at the Institute of 4 00:00:10,280 --> 00:00:14,600 Speaker 1: International Finance saying this, we'll likely see burgeoning Emina activity 5 00:00:14,640 --> 00:00:18,959 Speaker 1: with an improved deal making landscape, personnelist policy. Amory says 6 00:00:18,960 --> 00:00:21,000 Speaker 1: that all the time. So we'll see who comes in 7 00:00:21,120 --> 00:00:24,120 Speaker 1: at the regulatory agencies to learn more about the future 8 00:00:24,239 --> 00:00:27,080 Speaker 1: of regulations. Tim joins us Now, Tim, thank you so 9 00:00:27,160 --> 00:00:29,479 Speaker 1: much for being here. Being here, so, do you see 10 00:00:29,520 --> 00:00:31,720 Speaker 1: right now the banking sector is really driving a lot 11 00:00:31,760 --> 00:00:35,000 Speaker 1: of the optimism in the financial space going forward. 12 00:00:35,080 --> 00:00:37,120 Speaker 2: Sure, and they're hearing from their clients. The animal spirits 13 00:00:37,159 --> 00:00:38,720 Speaker 2: are back in the US. The outlook is for the 14 00:00:38,720 --> 00:00:40,640 Speaker 2: near term at least, it's pretty bright. There's a sense 15 00:00:40,640 --> 00:00:43,360 Speaker 2: of deregulation across Europe in the US. Will see how 16 00:00:43,440 --> 00:00:45,600 Speaker 2: much of that actually happens. But you know, there's a 17 00:00:45,640 --> 00:00:47,760 Speaker 2: sense of optimism that we haven't seen in a while. 18 00:00:48,080 --> 00:00:50,760 Speaker 3: Does that optimism is it mostly centered or should it 19 00:00:50,760 --> 00:00:53,680 Speaker 3: be mostly centered on the largest American banks or the 20 00:00:53,720 --> 00:00:54,320 Speaker 3: smaller ones? 21 00:00:54,400 --> 00:00:56,080 Speaker 2: Well, I think it's across the board. I think Main 22 00:00:56,120 --> 00:00:57,880 Speaker 2: Street Wall Street are going to do well over the 23 00:00:57,920 --> 00:01:01,240 Speaker 2: near term, but Wall Street look that looks the near 24 00:01:01,320 --> 00:01:03,640 Speaker 2: term with great optimism. I think deal flow is going 25 00:01:03,680 --> 00:01:05,200 Speaker 2: to pick up. We're going to see IPOs, You're going 26 00:01:05,200 --> 00:01:07,600 Speaker 2: to see M and A activity, and that's good for our institutions. 27 00:01:07,920 --> 00:01:10,080 Speaker 4: I know you're concerned though about the deficit, so you 28 00:01:10,200 --> 00:01:12,920 Speaker 4: took kindly to the fact there's some deficit hawks when 29 00:01:12,920 --> 00:01:15,400 Speaker 4: it comes to personnel's policy. But over the weekend Trump 30 00:01:15,400 --> 00:01:18,480 Speaker 4: said that he's not going to cut Social Security entitlements, 31 00:01:18,560 --> 00:01:20,600 Speaker 4: not going to raise the retirement age. How are you 32 00:01:20,600 --> 00:01:21,720 Speaker 4: supposed to get the deficit down? 33 00:01:21,920 --> 00:01:24,360 Speaker 2: Yes, it's very hard because most of what you just described, 34 00:01:24,360 --> 00:01:27,000 Speaker 2: if you look at a social insurance and defense and 35 00:01:27,040 --> 00:01:28,760 Speaker 2: net interest, some of the debt is about ninety percent 36 00:01:28,760 --> 00:01:30,160 Speaker 2: of what we spend. The rest is kind of a 37 00:01:30,200 --> 00:01:33,040 Speaker 2: rounding error. We can grow, and I think Scott bessen To, 38 00:01:33,040 --> 00:01:35,120 Speaker 2: who's going to be the next Treasure Secretary, is focused 39 00:01:35,120 --> 00:01:36,520 Speaker 2: on growth. That's good, but we're going to have to 40 00:01:36,560 --> 00:01:40,480 Speaker 2: find ways to find savings. Deficit hawks are gone in Washington. 41 00:01:40,520 --> 00:01:43,000 Speaker 2: They don't exist anymore. And maybe you need the Marcus 42 00:01:43,000 --> 00:01:45,440 Speaker 2: to send as a signal it's time to become more 43 00:01:45,480 --> 00:01:47,319 Speaker 2: sober in our fiscal outlook. 44 00:01:47,520 --> 00:01:49,440 Speaker 1: Tim, You've spent a lot of time focused on the 45 00:01:49,440 --> 00:01:51,560 Speaker 1: structure of the financial system in the United States, and 46 00:01:51,560 --> 00:01:55,240 Speaker 1: by all accounts, it's really strong and it's diversified. There's 47 00:01:55,240 --> 00:01:58,640 Speaker 1: been a lot of discussion around mergers amongst smaller banks 48 00:01:58,640 --> 00:02:00,320 Speaker 1: and how much we could see if they're is an 49 00:02:00,320 --> 00:02:03,240 Speaker 1: administration that is amenable to that kind of tie up, 50 00:02:03,760 --> 00:02:04,840 Speaker 1: how much could we see. 51 00:02:04,880 --> 00:02:06,440 Speaker 2: I think you'll see a lot. I think you ended 52 00:02:06,480 --> 00:02:09,600 Speaker 2: up seeing a barbelling. The largest institutions get larger and 53 00:02:09,760 --> 00:02:12,760 Speaker 2: the mid size become larger. It's a scale business. Look 54 00:02:12,800 --> 00:02:16,440 Speaker 2: at JP Morgan spend seventeen trillion billion dollars a year 55 00:02:16,680 --> 00:02:20,480 Speaker 2: on technology. Jamie probably would spend trillion. But think about 56 00:02:20,480 --> 00:02:22,679 Speaker 2: the tech spin that these institutions put in place and 57 00:02:22,680 --> 00:02:25,480 Speaker 2: who they're competing with. And then you'll see smaller local 58 00:02:25,480 --> 00:02:28,200 Speaker 2: institutions than know the local markets. So it's a bifurcation. 59 00:02:28,520 --> 00:02:30,240 Speaker 2: The mid sized guys are going to get bigger. 60 00:02:30,320 --> 00:02:33,160 Speaker 1: Well, you raise this question, who aren't the big competitors? 61 00:02:33,400 --> 00:02:34,040 Speaker 2: Is it Apple? 62 00:02:34,400 --> 00:02:37,000 Speaker 1: Is it absolutely or is this an issue of say, 63 00:02:37,480 --> 00:02:39,440 Speaker 1: the Apollos of the world. And this has been sort 64 00:02:39,440 --> 00:02:43,239 Speaker 1: of the two sided barbell at a time where potentially 65 00:02:43,320 --> 00:02:46,000 Speaker 1: fewer regulations for the largest banks could make them more 66 00:02:46,040 --> 00:02:47,000 Speaker 1: competitive against both. 67 00:02:47,120 --> 00:02:49,760 Speaker 2: Yeah, I probably mean two hundred CEOs a year. In 68 00:02:49,800 --> 00:02:51,919 Speaker 2: the financial sector. We hear a lot about private credit 69 00:02:51,919 --> 00:02:54,360 Speaker 2: and private equity. We hear a lot about Apple, Google 70 00:02:54,360 --> 00:02:56,760 Speaker 2: and the tech platforms. And if you're Jamie, you're trying 71 00:02:56,800 --> 00:02:59,480 Speaker 2: to compete with the tech platforms, right, And then if 72 00:02:59,520 --> 00:03:02,160 Speaker 2: you're and then maybe you can acquire or partner with 73 00:03:02,200 --> 00:03:03,600 Speaker 2: private equity and private credit. 74 00:03:03,960 --> 00:03:06,560 Speaker 3: I'm really curious what happens to Europe in all of this. 75 00:03:06,960 --> 00:03:09,679 Speaker 3: If you have this growing American banking system, if the 76 00:03:09,720 --> 00:03:12,160 Speaker 3: biggest get bigger and they're not just eating the smaller 77 00:03:12,200 --> 00:03:14,359 Speaker 3: bank's launch, they're taking it from Europe too, which has 78 00:03:14,360 --> 00:03:17,560 Speaker 3: been really struggling and has tried UniCredit commerce trying to 79 00:03:17,560 --> 00:03:20,400 Speaker 3: get some sort of merger through. Does something need to change? 80 00:03:20,440 --> 00:03:21,600 Speaker 3: But it finally start. 81 00:03:21,360 --> 00:03:24,640 Speaker 2: To absolutely core Europe is on this back politically and economically. 82 00:03:24,639 --> 00:03:28,679 Speaker 2: German economy is really struggling. Periphery is doing much better, Spain, Greece, Poland, 83 00:03:29,160 --> 00:03:32,960 Speaker 2: But Europe needs banking consolidation, the need capital markets, union, banking, 84 00:03:33,000 --> 00:03:35,040 Speaker 2: and there's so much that this new Commission and this 85 00:03:35,040 --> 00:03:37,760 Speaker 2: new Parliament needs to take on. They're saying the right things, 86 00:03:37,960 --> 00:03:40,000 Speaker 2: but we'll see it's time for action across Europe. 87 00:03:40,120 --> 00:03:42,200 Speaker 4: We saw uned Credit try to do that with Commerce Bank, 88 00:03:42,440 --> 00:03:44,800 Speaker 4: and the Germans really did not want that to happen. 89 00:03:45,120 --> 00:03:48,400 Speaker 4: What could give the boost to these countries to say, okay, 90 00:03:48,400 --> 00:03:49,560 Speaker 4: we should start consolidating. 91 00:03:49,600 --> 00:03:52,520 Speaker 2: Well, you're hearing it from Christine Loard the ECB. She's 92 00:03:52,520 --> 00:03:55,240 Speaker 2: signaling a unique consolidation. You need Brussels to say it's 93 00:03:55,280 --> 00:03:57,520 Speaker 2: time to act as time to consolidate. I think this 94 00:03:57,600 --> 00:03:59,040 Speaker 2: deal is going to go through over time, and I 95 00:03:59,080 --> 00:04:00,880 Speaker 2: think we'll see more over time as well. 96 00:04:00,960 --> 00:04:03,240 Speaker 1: Hold on a second. You think that the Germans are 97 00:04:03,240 --> 00:04:06,360 Speaker 1: going to be okay with an Italian bank taking over 98 00:04:06,400 --> 00:04:08,680 Speaker 1: one of their national champions, Let's underscore. 99 00:04:08,400 --> 00:04:11,560 Speaker 2: They already have. The Italians have already taken over. They 100 00:04:11,640 --> 00:04:14,360 Speaker 2: have no choice, right. These are great institutions. I like 101 00:04:14,360 --> 00:04:17,200 Speaker 2: Comerance Bank. The CEO Betina is wonderful. I think they 102 00:04:17,240 --> 00:04:20,240 Speaker 2: all realize that to compete domestically and if nationally compete 103 00:04:20,240 --> 00:04:22,719 Speaker 2: with US firms on the continent, they've got to consolidate. 104 00:04:22,880 --> 00:04:24,800 Speaker 1: Tim you talk with a lot of regulators. You talk 105 00:04:24,839 --> 00:04:27,400 Speaker 1: with a lot of elected politicians, and I'm curious about 106 00:04:27,400 --> 00:04:30,240 Speaker 1: whether you've really heard a change in tone over in 107 00:04:30,279 --> 00:04:34,000 Speaker 1: Europe that recognizes how different this moment is that they're in. 108 00:04:34,440 --> 00:04:36,680 Speaker 2: I think the Trump shock has gotten their attention. I 109 00:04:36,680 --> 00:04:38,880 Speaker 2: think they know they have to do more. But Brussel's 110 00:04:38,880 --> 00:04:42,520 Speaker 2: a challenging place. You know, it's a bureaucratic machine. So 111 00:04:42,600 --> 00:04:45,039 Speaker 2: you need political leadership right now. That's missing in France 112 00:04:45,040 --> 00:04:47,680 Speaker 2: and Germany. Hopefully in six months we'll have greater stability. 113 00:04:48,000 --> 00:04:50,880 Speaker 2: Brussels needs to act, Frankfort needs to act. We need 114 00:04:50,920 --> 00:04:52,240 Speaker 2: to see political leadership. 115 00:04:52,320 --> 00:04:54,840 Speaker 4: Where is the political leadership right now? And you're at 116 00:04:54,839 --> 00:04:57,400 Speaker 4: the G seven, it felt like it was Georgia Maloney 117 00:04:57,480 --> 00:05:01,040 Speaker 4: that was almost this central figure of your because everyone 118 00:05:01,080 --> 00:05:03,400 Speaker 4: that showed up was either a lame duck or on 119 00:05:03,440 --> 00:05:04,000 Speaker 4: their way out. 120 00:05:04,360 --> 00:05:07,440 Speaker 2: Well, the polls have the rotating presidency the EU. They're 121 00:05:07,600 --> 00:05:09,440 Speaker 2: very pro growth and I like what they've done with 122 00:05:09,440 --> 00:05:11,680 Speaker 2: their economy. I like where they want to go. Spain 123 00:05:11,760 --> 00:05:13,760 Speaker 2: is saying look at us, we're growing fast. In Greece, 124 00:05:14,000 --> 00:05:16,760 Speaker 2: which was always sort of the stepchild of the EU 125 00:05:16,839 --> 00:05:19,480 Speaker 2: for so many years, is now really putting in great performance. 126 00:05:19,720 --> 00:05:22,000 Speaker 2: I think what you'll see over time core you're figuring 127 00:05:22,000 --> 00:05:24,440 Speaker 2: out they need to lead and do more, and Germany 128 00:05:24,520 --> 00:05:26,840 Speaker 2: is the secret and the key to the future of 129 00:05:26,880 --> 00:05:27,640 Speaker 2: European growth. 130 00:05:27,720 --> 00:05:30,400 Speaker 1: So you've done on this whirlwind tour of the whole world. 131 00:05:30,520 --> 00:05:32,360 Speaker 1: You're coming to an end. I'm sure you're very happy 132 00:05:32,440 --> 00:05:35,200 Speaker 1: to be going home. What's your big tic takeaway, Tim, 133 00:05:35,240 --> 00:05:38,080 Speaker 1: after meeting with international leaders of finance around the world. 134 00:05:38,279 --> 00:05:41,039 Speaker 2: Yeah, there's an enormous optimism about the US, but there's concerns. 135 00:05:41,080 --> 00:05:43,200 Speaker 2: There's just so much we don't know about what this 136 00:05:43,240 --> 00:05:45,960 Speaker 2: new administration is going to do. The economic leaders that 137 00:05:46,000 --> 00:05:48,960 Speaker 2: have been put in place, that personnel's policy have really 138 00:05:49,000 --> 00:05:53,200 Speaker 2: boyd that outlook. But ultimately, how will these different policies 139 00:05:53,200 --> 00:05:55,560 Speaker 2: be put in place? Will we see tariffs? Is it selective, 140 00:05:55,640 --> 00:05:59,280 Speaker 2: incremental or is it much broader? We just don't know. 141 00:05:59,520 --> 00:06:01,840 Speaker 1: Tim Adam of the IF, thank you so much for 142 00:06:01,880 --> 00:06:02,440 Speaker 1: being with us.